Thursday, April 9, 2009

Last week, we introduced you to the ultimate hedge fund portfolio replication tool that we use on a daily basis:Alphaclone. We walked you through the basics of the web-based tool and showed you how you can track a hedge fund portfolio. Since they're running a 50% discount right now, we're going to show you the advanced features this week and detail how you can create custom clones made up of multiple hedge funds. So, before we get to it, make sure you check out our introduction to Alphaclone.

In order to illustrate Alphaclone's unique ability to combine multiple hedge fund portfolios into one streamlined portfolio, we're going to look at their pre-made clone: The Tiger Cub Portfolio. As regular Market Folly readers are well aware, the 'Tiger Cubs' are hedge funds ran by managers who used to ply their trade at Julian Robertson's legendary hedge fund: Tiger Management. When Tiger disolved, many of these analysts and managers went on to start their own hedge funds such as: Maverick Capital, Blue Ridge Capital, Shumway Capital, Viking Global, and many more. These funds are pretty well known and have solid track records themselves. And, most notably, they are excellent stock pickers, which is why we track them here at Market Folly. The numbers speak for themself: The clone of the ex-Tiger Management hedge funds has beaten the S&P 500 by 15.5% annualized since 2000.

How the Portfolio is Created

The Tiger Cub portfolio takes the portfolios of 21 hedge funds and lets you dial it down into one collective portfolio, which you can ultimately control the settings of. When you pull up the Tiger Cub clone in Alphaclone, here's what you see: The clone lets you select a portfolio based on 1 of 3 ways. First, you have the option to select positions by the top holdings. This portfolio will take the top holding of each Tiger Cub and combine it into a collective portfolio. You can also choose the top 2, 3, or 5 holdings from each Cub to put into the clone. Under this setting, you equal-weight all of the holdings and you can run it as a long only fund, or you can hedge it, with hedges at either 25%, 50%, 75%, or 100%. Backtesting all the various scenarios is very helpful here, and Alphaclone does it all for you automatically.

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Second, you can also choose to select a portfolio based on the Cubs' "best ideas." In this clone, you can choose the 1, 2, 3, or 5 best ideas from each of the 21 Tiger Cubs. This compiles a portfolio based on the positions they added to the most over the last quarter. What's great about this portfolio setting is that you can instantly see what positions they've been adding to in size very recently. This setting also uses equal-weightings for each position and gives you the option to run long only or to hedge (at either 25%, 50%, 75%, or 100%).

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Lastly, you also have the option to run the clone based on the 'popular' positions. This portfolio takes the most commonly occurring positions across the 21 Tiger Cub portfolios. You can select a portfolio based on the single most popular holding, the 3 most popular holdings, the top 5, the top 10, or even the top 20 most common positions amongst them. This portfolio setting is especially interesting in the Tiger Cub clone because as we've illustrated on the blog before, the Cubs often have high portfolio correlation. And, as always, you can run this portfolio long only, or hedged to whatever degree you please.

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Portfolio Performance

As you can tell, there's a ton of different portfolios you can create and backtest. To give an example, let's look at the top 10 most popular holdings (the holdings most commonly appearing amongst the Cubs). We'll run this equal-weighted and 50% hedged. Based on these settings, Alphaclone tells us we have 15% turnover, 7.5 alpha, 0.5 beta, and 0.6 correlation to the S&P 500. The max drawdown of -31.8% is significantly less than that of the S&P as well. You'll notice that this specific portfolio clone is up 16.6% for 2009 thus far, compared to S&P -9%, which is some significant outperformance. And, this specific clone has outperformed 8 of the past 10 years.

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Portfolio Holdings

Then if we scroll down to our clone portfolio holdings, it shows us our ten holdings. The first position on the list is Qualcomm (QCOM), with 10 of the Tiger Cubs owning it. The second is Mastercard (MA), with 8 Cubs owning it. And, as you go down the list, you see some very solid names.

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You can also click on the 'Past Portfolios' tab to show what the portfolio would have held over the past 2 quarters and then compare it to the current holdings. With this setup, you merely rebalance the portfolio 4 times a year (each time the 13F filings come out), and you're good to go. The 'Recent Trades' tab shows you which securities to sell and which to buy in their place for each rebalance period. As you can see, it really is very easy to run a hedge fund portfolio clone.

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Keep in mind that we've only illustrated one of the ways to create the clone. You can also do it based on 'top holdings' or 'best ideas' and then run long only or adjust the hedging on each setting. So, now that you know how to clone a portfolio based on a group of multiple hedge funds, the options in Alphaclone are endless. Think about that for a second. You can take any of the hedge funds listed in the database and you can mix and match and combine as few or as many of them as you like. Once you've created your single portfolio based on multiple hedge fund managers, you can drill it down and decide how to run the portfolio. You can pick their top holdings, their best ideas, or the securities that are the most commonly held between the funds you've selected.

Stay Tuned Next Week

This ability to create a single portfolio based on the ideas of multiple hedge fund managers is one of Alphaclone's best tools. It saves you thousands of hours of digging through tons of hedge fund filings. And, it lets you backtest those portfolios using all the historically accurate portfolio information. To truly harness the capability of Alphaclone, we've spent a ton of time tweaking various clones and have finally created our own MarketFolly clone. Stay tuned next week when we'll reveal the hedge funds we've selected, the strategy, & the subsequent portfolio holdings for our very own MarketFolly clone.

If you want to create your own hedge fund portfolios or clone those of existing hedge funds, Alphaclone is your tool. We use it on a daily basis and now you can track & clone hedge fund portfolios just like we do. As we mentioned before, they are offering a 50% discount, so take advantage of that before it disappears. If you missed it, make sure to also check out our introduction to Alphaclone.

In a 13D filed after the close yesterday, Seth Klarman's Baupost Group has boosted their position and has now disclosed a 17.8% ownership stake in Facet Biotech (FACT) due to activity on April 8th, 2009. The aggregate amount of shares beneficially owned is now 4,374,407. When we covered their 13F filing, we noted that as of December 31st, 2008, Baupost owned 2,772,092 shares of FACT. So, Baupost has boosted their position in FACT substantially. Baupost has been pretty active with their portfolio lately, having just increased their position in RHI Entertainment (RHIE) and filing numerous other SEC filings as well. You can view the rest of Baupost's portfolio here.

If you're unfamiliar with Klarman and Baupost, then here's what you need to know: Klarman received his MBA from Harvard Business School and started working at Baupost at age 25. Over the past 25 years, Baupost has seen an annual compound return of 20% and is ranked 49th in Alpha's hedge fund rankings. Klarman has always considered himself a value investor and has been patient through the market turmoil. The past few years they have had nearly half their $14 billion in assets in cash. But, with turmoil comes opportunity. And, as such, Baupost's cash has been gradually deployed by Klarman and Baupost's 100 employees, leaving them with around a fourth of assets left in cash. Klarman's investment process is detailed in his book Margin of Safety. In it, he lays out a "how-to" on risk-averse value investing. The book is no longer actively printed and is very hard to find. His take on recent market action can be viewed in his interview with Harvard Business School and his thoughts from Value Investor Insight.

Taken from Google Finance,

Facet Biotech is "a biotechnology company. The Company is focused on developing therapeutics for cancer and immunologic diseases. Its products include Daclizumab, Volociximab, Elotuzumab, PDL192, and PDL241. Daclizumab is a humanized monoclonal antibody, with a potential in a range of inflammatory diseases, including multiple sclerosis. It can be used as a maintenance therapy for organ transplant. Volociximab is a chimeric monoclonal antibody, with a potential in treating a range of solid tumors and its role in angiogenesis also aid in the treatment of age related macular degeneration (AMD). Elotuzumab is a humanized monoclonal antibody used to treat multiple myeloma. PDL192 is a humanized monoclonal antibody used to treat tumor indications including pancreatic, colon, lung, renal, breast, head, and neck cancers. PDL241 is a humanized monoclonal antibody, with a potential in immunologic diseases."

January 2008 Profile of Jim Simons & Renaissance Technologies - The code breaker [Bloomberg] ~ it's older, but a very good piece. Hat tip to reader Peter for reminding us of it after all this time! See also our recent coverage of Rentec's portfolio (just for fun, not for tracking purposes; since they are quant)

Wednesday, April 8, 2009

It's time to check in on some how of the big name hedge funds have been performing over the last month. If you missed our last updates, we've previously covered their 2008 year end performance, as well as their January & Feburary 2009 performance. We'll first get to the numbers and then follow up with some commentary. In no particular order:Hedge Funds in general gained 1.8% for March. According to Hedge Fund Research, equity hedge funds were the best performers (gaining 3.4%), while global macro performed the worst (-1.21%).

Overall, the hedge funds profiled above fared well in March. Some analysts believed that up to as much as 13% of the capital in the industry was withdrawn in the first quarter. Additionally, International Financial Services London thinks hedge fund assets could drop more than 20% in 2009. And, this would be in addition to the 30% drop we saw last year. While we believe that the major wave of redemptions is behind us (November), there will still be little ripples as those in need of capital scrounge up what they can. This, of course, would also assume we don't have another massive market collapse. Last year and this year certainly separated the pack though. Make sure to check out Forbes' billionaire list, the top 25 highest paid hedge fund managers of 2008, as well as the top hedge fund manager losers of 2008. For the most part, hedge funds have outperformed the S&P500 thus far. We'll have to see if this trend continues, seeing as funds started off 2008 well, then slumped in the later part of the year.

This is the 4th Quarter 2008 edition of our ongoing hedge fund portfolio tracking series. Before reading this update, make sure you check out the Hedge Fund 13F filings preface.

Next up is SAC Capital, founded by Steven Cohen. Taken from their website, “SAC is a multi-strategy, private asset management firm founded by Steven A. Cohen in 1992 with 9 employees and $25 million in assets under management. As of July 2008, the firm has grown to over 800 employees with approximately $14 billion in assets under management. SAC's initial investment style was "trading" oriented. However, we have evolved into a multi-strategy, multi-disciplinary, investment management firm emphasizing rigorous research and risk management practices. SAC's investment strategies include, but are not limited to: Fundamental and Technical Long/Short Equity Portfolios, Global Quantitative Strategies, Fixed Income and Credit, Global Macro Strategies, Convertible Bonds, and Emerging Markets.”

Since inception, their funds have returned on average 40% annually, which explains how they can charge a 50% performance fee to investors, compared to the normal 20% that most hedge funds charge. In terms of recent performance, SAC was +3% for March 2009 and sits up around 10% year to date. Stevie Cohen was recently on Forbes' billionaire list, as well as the top hedge fund manager losers of 2008, due to the rough year they had. And, if you're curious, you can see a picture of Cohen's house here.

Disclaimer: SAC are very active traders and at any given time can account for up to 3% of the volume on the New York Stock Exchange and up to 1% on the Nasdaq. As such, we are merely tracking their portfolio for fun and for entertainment purposes only. A lot of readers request the info just out of curiosity, so here it is. We do not recommend using their portfolio for investment ideas etc. The funds we typically track have longer investment timeframes and are more appropriate to track over time. SAC on the other hand trades so frequently that we are merely posting this for fun.

The following were their long equity, note, and options holdings as of December 31st, 2008 as filed with the SEC. We have not detailed the changes to every single position in this update, but we have covered all the major moves. All holdings are common stock unless otherwise denoted.

Just like when we covered Renaissance's portfolio yesterday, we are not going to attempt to explain the rhyme or reason behind SAC's picks. We can't gauge why they are in them, nor do we know how long they will be holding them. As such, take everything with a grain of salt due to their trading nature. However, one thing you can't help but notice is their tendency to gravitate towards bonds; the majority of their top holdings are bonds/debt. Their assets listed in the 13F essentially got chopped in half, due to some combination of poor performance, decreasing equities/bonds/options exposure, and some redemption requests. Assets from the collective long US equity, options, and note holdings were $7.7 billion last quarter and were $3.45 billion this quarter. This is just one of many funds in our hedge fund portfolio tracking series in which we're tracking 35+ prominent funds. We've already covered:

Wanted to post up the great commentary of Don Coxe. Here is his latest 'Basic Points' for March 2009. Make sure to also check out our post on Coxe's bullishness on agriculture. (Rss & Email readers may need to come to the blog to read the slideshow).

Tuesday, April 7, 2009

This is the 4th Quarter 2008 edition of our ongoing hedge fund portfolio tracking series. Before reading this update, make sure you check out the Hedge Fund 13F filings preface.

Next up is Jim Simons' Renaissance Technologies, ranked 4th in Alpha's 2008 hedge fund rankings. Rentec, as they are commonly known, was started by Simons in 1982 and has around $25 billion in assets total. They employ mathematical and statistical methods to execute their investments and trades. Their flagship $7 billion Medallion fund has averaged annual returns around 35%. Unlike most hedge funds which charge a flat 2% management fee on assets and then a 20% performance fee, Medallion charges a 5% management fee and a performance fee > 40%. The fees are high, but after seeing their returns, one could argue it is easily worth it. Medallion finished up 80% for 2008, as noted in our hedge fund year end performance post. The bad news to anyone reading is that the fund is pretty much limited to only former and current Renaissance employees. Simons other funds, which are open to other investors, were both down in '08. In terms of recent performance, we saw that their Institutional Equities Fund was -4.61% for February and -8.84% for 2009 at that time, as mentioned in our January & February hedge fund performance post. Rentec is noted to be the most successful hedge fund in the industry, with returns eclipsing other legendary investors including Paul Tudor Jones, Bruce Kovner, and George Soros.

Disclaimer: Do note that tracking Rentec through 13F filings is not beneficial due to the quant nature of their firm. We are tracking them because they are a popular, prominent fund with solid returns and many readers continually request it. While the majority of funds we cover are appropriate for tracking given their strategy and research methods, there is no way for us to know why Rentec holds a certain position. So, we are simply posting this up for fun. Use this information for entertainment purposes only. Again, they are mainly a quant firm and they trade every asset class under the sun. The majority of equity holdings you will see in their portfolio are most likely from their Institutional Equities Fund. Please keep this info in mind when viewing below.

The following were their long equity, note, and options holdings as of December 31st, 2008 as filed with the SEC. We have not detailed the changes to every single position in this update, but we have covered all the major moves. All holdings are common stock unless otherwise denoted.

Like we mentioned earlier, there is practically zero explanation for the rhyme or reason of any of their moves due to Rentec's quantitative nature. As you can see in the "increased" category, Renaissance ratcheted up their positions big time, many a time by over 500%. But, you also have to keep in mind that since they hold so many equities, those positions still aren't even over 0.75% of their overall portfolio. The only names that really rocketed up to the top of the portfolio were McDonald's, Coca Cola, Transocean, General Electric, and Monsanto. While many typical long/short equity funds we follow will have 4-8% of their portfolio in their top holding, Renaissance's top equity holding is only 1.3% of their overall portfolio. Assets from the collective long US equity, options, and note holdings were $38.1 billion last quarter and were $27.6 billion this quarter. This is just one of many funds in our hedge fund portfolio tracking series in which we're tracking 35+ prominent funds. We've already covered:

The recent news out of Sun-Times Media adds yet another name to the list of pre-bankruptcy/bankrupt newspaper chains. Not only are newspapers seeing decreased advertising revenue and decreased circulation, but many are trying to stave off crushing debt loads. Even newspapers who have relatively successfully navigated things thus far are showing some signs of weakness. The Wall Street Journal has benefited by providing focused, niche content and by recognizing the digital shift. As such, they began to provide digital content and immediately started monetizing it. But, although they've had relative success there, they are still fighting for readers as they offer a 75% discount. Undoubtedly, something will have to give and certain names in the industry will have to start selling off assets, go private, or morph/evolve into a non-profit or new media company.

If you have been following our twitter updates, you would have seen us shorting New York Times (NYT) back at $7.70 and covering down at $4. Currently, we are not involved and figured it would be prudent to survey the macro landscape as it relates to the industry. Then, in a future post, we'll survey the NYT in particular (which we've highlighted before due to the ownership presence of hedge fund Harbinger Capital Partners and Mexican billionaire Carlos Slim). We want to focus on them due to the fact that their current status is very representative of many other industry players. Their battle with monetization and various business plans is well documented so far. Undoubtedly, something will have to give and certain names in the industry will have to start selling off assets, go private, or morph/evolve into a non-profit or new media company.

The industry itself is facing a few key issues including crushing debtloads, decreasing revenues/circulation/readership, a secular shift, and a battle with their kryptonite: monetization. We want to start by pointing out the excellent article out of Slate last week on this very topic. Basically, Daniel Gross lays out the facts that the newspapers filing for bankruptcy are ones that have been stockpiled with debt and/or idiotic management decisions. He highlights great points that many have analysts have brushed aside. But, he also admits that some industry players (mainly smaller ones) are in trouble. The core of the problem here is the debtload many newspapers face. It doesn't help that they've been hit with the perfect storm of debt loads, decreasing revenues, decreasing circulation/readership, and the worst economic situation since the great depression. We're in the eye of the storm and this hurricane has simply taken their problems and magnified them tenfold.

The problem though, is what will they do when things stabilize and return to 'normal'? If the economy were to recover tomorrow, then advertising revenues would pick back up (which would help their cash cushion and delay their debt-duel a little bit longer). But, they still have the problem of decreasing circulation and/or readership. Readers are trading physical papers in favor of online media. And, if this truly is a secular trend, then newspapers have a much larger problem at hand. How can they monetize things besides advertising? The New York Times' struggle is the perfect example of this very problem. Do they charge for some content? All content? Who knows? It's a tough sell in an environment where information becomes freer by the day.

Newspapers are fighting three concurrent battles that are all a function of each other. They can't truly fix their business woes until they find a way to increase revenues and monetize their digital content. Cash infusions are merely a quick fix and most likely do not solve their long-term problems. Newspapers are like drug addicts because that quick ‘hit’ of cash feels good, but they are still left wanting and needing more. Assuming the trend plays out, more and more readers will shift to digital and they have to find a way to make money from that. This brings us to the second battle: monetization. This in and of itself will probably be the trickiest for them. They can shift with the trends and give readers what they want, but can they make money off of it? The answer thus far is: not really. We'll simply have to wait and watch this giant tug of war of trial and error before we can gain more insight. Lastly, you have the battle with readership and circulation. Circulation for the most part is down, and readers/subscribers of print versions are down. To compensate for this, they've ramped up their digital content, staying in line with the trend. But, this reverts back to their problem of truly monetizing the digital content through various (thus far ineffective) business models. Not to mention, they are trying to do so in an modern-day world where information is everywhere and more often than not, it is free.

The uphill battle they face is depicted (ironically enough) by the NYT. Below, you'll see their illustration of changes in circulation and revenues across the country:

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Go here if the graphic is still too small to read after enlarging. Obviously, the industry has a lot of headwinds and the fact that stubborn majority owners control many of them doesn't seem to be helping things (if you're a shareholder). While companies like the NYT have made strides in raising cash to fight off near term maturities, they are seemingly just drawing out the inevitable battle with their debt destiny.

Simply put, it is way too early to gauge if newspapers are a dying industry. And, those attempting to proclaim their death prematurely are oblivious to the daily evolution of all forms of media. We do not think that newspapers as an entire industry will succumb to this economic quicksand. Don't get us wrong though, we're bearish on the industry longer-term and feel they are battling a rising secular trend without a concrete gameplan. As many traders say, "The trend is your friend." Until it's not.

That's the wrench in this whole equation: trends and innovation. Newspaper companies could come out tomorrow and completely revolutionize and revitalize readership and their streams of income with some new amazing "thing" that no one could have ever predicted. It’s not likely, but stranger things have happened. We would be inclined to present an alternative outcome for the industry. While the physical newspaper itself may in turn slowly die, the industry as a whole will be forced to morph and evolve into a new means of distribution, a new medium/platform, and a new business model. If they don't, and the debt finally crushes them, then they'll die. That's the catch. Everyone is on the lookout for the death of the industry, when they instead should be focusing on who will morph and evolve, and who won't. There will be survivors, but they most likely won't be a 'newspaper' in the true sense of the word.

With this we arrive at no firm conclusions and a lot of "we'll wait and see." This is mainly because media in and of itself is constantly evolving and changing. The ball is in their court and we have to wait for their move before declaring death to their industry. We like to look at it as more of an evolution and metamorphosis with hints of Darwinism. The physical newspaper itself may die, but the industry players will be forced to morph into some new iteration of a media player. We've already begun to see the big push in terms of digital content. But, what's next? Those who figure it out will survive. In the end, it's all about the numbers: their debtload, the number of readers, and how much revenue they can generate. However, one cannot overlook the non-numerical input: secular shifts & trends. And, right now, the trend is most definitely not their friend.

Monday, April 6, 2009

This is the 4th Quarter 2008 edition of our ongoing hedge fund portfolio tracking series. Before reading this update, make sure you check out the Hedge Fund 13F filings preface.

Next up is Touradji Capital ran by Paul Touradji. Touradji is one of many well-known 'Tiger Cubs' who started their own firms after leaving Julian Robertson's Tiger Management. We've already covered many of the 'Tiger Cub' funds including Stephen Mandel's Lone Pine Capital, Andreas Halvorsen's Viking Global, Lee Ainslie's Maverick Capital, Chase Coleman's Tiger Global, Chris Shumway's Shumway Capital Partners, and John Griffin's Blue Ridge Capital. Taken from our post on 'Tiger Cub' biographies, "Paul Touradji is the President and Chief Investment Officer of Touradji Capital Management LP, a New York-based hedge fund specializing in fundamental research and active investment in commodities and related assets. The firm manages approximately $3.5 billion and invests in both the public and private markets. Mr. Touradji has well over a decade of experience investing in the commodity, equity, and macro markets. Mr. Touradji began his commodities career at Tiger Management in the mid '90s, where he managed the commodities team; it was at Tiger that he developed his fundamental approach to analysis and investment in commodities. Prior to Tiger, Mr. Touradji’s specialty was quantitative arbitrage, principally with O’Connor Partners. Mr. Touradji is a 1993 graduate of the McIntire School of Commerce at the University of Virginia and a Certified Financial Analyst."

Towards the end of last year at a 'Tiger Cub' hedge fund manager panel, Touradji advocated shorting Copper as the world deleverages and the velocity of money drops, and that thesis played out just as predicted. It would be interesting to get his updated take on copper now that it has rallied back a little bit. We just recently noticed that Touradji was one of the Top 25 highest paid hedge fund managers in 2008, coming in at number 16. Also, back in January we mentioned that Touradji was starting an additional fund. Please note that Touradji specializes in commodities and those holdings are not reported in 13F filings. But, he still has some equity positions and we check in on those each quarter. We keep tabs on him for his Tiger background, his solid overall performance, and to see if he is playing any investment themes. But, we want to make sure everyone realizes that he is different than the typical hedge funds we cover and he has limited equity exposure.

The following were their long equity, note, and options holdings as of December 31st, 2008 as filed with the SEC. We have not detailed the changes to every single position in this update, but we have covered all the major moves. All holdings are common stock unless otherwise denoted.

Some New Positions(Brand new positions that they initiated in the last quarter):General Electric (GE)Jacobs Engineering (JEC)Gushan (GU)

Some Reduced Positions (Some positions they sold some shares of - note not all sales listed)Encore Acquisition (EAC): Reduced position by 50%Chesapeake (CHK): Reduced position by 48.8%McDermott (MDR): Reduced position by 39.7%Whiting Petroleum (WLL): Reduced position by 30%Delta Petroleum (DPTR): Reduced position by 27.5%Baker Hughes (BHI): Reduced position by 5.4%

As we mentioned above, please again note that Touradji has very limited equity exposure and is primarily in commodities and other markets. We track him to monitor any themes he may be playing and from his holdings it looks like he likes natural gas a little bit via Petrohawk and Chesapeake. They also boosted their stake in Sandridge pretty substantially. But, by far the most notable move in their portfolio was the addition of General Electric. They started it as a new position and brought it up to over 50% of their portfolio, which is a very peculiar thing to see (even for a fund that isn't usually in equities). We'll have to see if this was merely a trade or something more. It's very rare to see funds with such a large concentration of their assets in one equity like this. Assets from the collective long US equity, options, and note holdings were $150 million last quarter and were $146 million this quarter. Again, note that that this $146 million is only one small fraction of his overall assets under management. Lastly, we wanted to point out that Touradji recently sent out an investor letter regarding the illiquid portion of their portfolio. This is just one of many funds in our hedge fund portfolio tracking series in which we're tracking 35+ prominent funds.

Seth Klarman's Baupost group has filed an amended 13D and Form 4 on their position in RHI Entertainment (RHIE) due to activity on April 1, 2009. In the filings, we learn that Klarman has increased his stake in RHIE and he now owns 36.29%. They show ownership of 4,900,551 shares and as per the Form 4, have added 437,017 new shares at a price of $1.19 on March 30th, 2009. Klarman's stake in RHI is activist (hence the 13D rather than 13G) and they will undoubtedly chat with management about strategic direction and all that good activist stuff. As we've covered previously, Klarman has been adding to his RHIE position over time. In terms of other Baupost positions, Klarman has also been adjusting other names in his portfolio as well. You can view all of Baupost's holdings here. It will be interesting to see what Klarman has lined up with this massive RHIE stake.

In terms of background on Baupost and Klarman for those not familiar: Klarman received his MBA from Harvard Business School and started working at Baupost at age 25. Over the past 25 years, Baupost has seen an annual compound return of 20% and is ranked 49th in Alpha's hedge fund rankings. Klarman has always considered himself a value investor and has been patient through the market turmoil. The past few years they have had nearly half their $14 billion in assets in cash. But, with turmoil comes opportunity. And, as such, Baupost's cash has been gradually deployed by Klarman and Baupost's 100 employees, leaving them with around a fourth of assets left in cash. Klarman's investment process is detailed in his book Margin of Safety. In it, he lays out a "how-to" on risk-averse value investing. The book is no longer actively printed and is very hard to find. His take on recent market action can be viewed in his interview with Harvard Business School and his thoughts from Value Investor Insight.

Taken from Google Finance,

RHI Entertainment, Inc. "develops, produces and distributes new made-for-television movies, mini-series and other television programming worldwide. The Company also selectively produces new episodic series programming for television."

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